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Australian mining company, Troy Resources, scraps production guidance for Karouni mine

Last Updated on Wednesday, 25 November 2020, 16:19 by Denis Chabrol

The Australian gold mining company, Troy Resources, has withdrawn its production guidance for the Karouni mine site, the Market Herald reported Wednesday.

The junior miner had initially forecast production of between 35,000 ounces and 40,000 ounces of gold at a cost of US$1500 and US$1550 per ounce (around A$2040 and A$2105 per ounce) for the 2021 financial year.

(A local spokesman for Troy Resources in Guyana could not immediately say what was the projected production for this year and how much it was now expected to be now that the production guidance has been withdrawn)

However, Troy said several issues have been plaguing production at the flagship South American mine, and as such, the company felt it pertinent to scrap this guidance today.

COVID blows
Not least of the issues has been a cluster of COVID-19 infections at the mine site in October. Troy said 23 positive cases were found at the site.

While the infections were dealt with effectively and impacts from the virus were minimised, the company said several employees were forced to self-isolate, dealing a blow to production.

On top of this, expats were banned from returning to Guyana, where the mine site is located, meaning some Troy employees couldn’t make it to site. (Health Minister Dr. Frank Anthony says no one has been banned from travelling to Guyana, but they are being asked to isolate themselves)

The company said Guyana is continually experiencing high levels of COVID-19 infections, which could make it tough to keep operating the Karouni mine for some time.

The September fire
On top of this, Troy is experiencing some production delays after a fire at the Karouni site in September.

The fire was contained to a storage area at the mine site and nobody was injured in the blaze. At the time, Troy said the fire had no immediate impact on production numbers but may cause some issues in the future when the company needs spare parts.

And, sure enough, Troy told investors today it has started to experience shortages of critical reagents and mill spare parts. The Karouni mill is still operational but only on a reduced basis because of the shortages.

In a small silver lining, Troy said the Hicks deposit in the Karouni area has generally reconciled very well.

Still, the production woes have been enough to drag Troy shares down 14 per cent today. At 12:58 pm AEDT, shares in TRY are trading at 8.6 cents each.